A short business week in Ethiopia with Christmas on Thursday. Business activity was further diminished by the small volumes traded at ECX. The main problem seems to be with lower quality (grade 5) price levels established by the Coffee and Tea Authority (C&TA). These are +/- 10 cents/lb below where they were trading before Maximum prices were introduced at ECX. Middlemen do not accept these reduced price levels and are shying away from delivering their stocks to ECX warehouses. Since prices are set weekly, we could see the C&TA review these this weekend to encourage more volume. As with Minimum Export Prices, these Maximum ECX prices do not appear to be well thought out, the price differences between grades do not make much sense and further blur the situation. Exporters are keen to sell has the crop is plentiful and larger in volume and improved in quality vs 2019/20 however the C&TA Maximum and Minimum price setting policy is hindering the normal flow from the interior to shippers’ warehouses.
Politically the country is stabilising following the turmoil in the North of the country in late 2020, however there is a sense of simmering unrest, due to both internal and external pressures.
USD 1 = Birr 39.28
Have a good weekend.